First steps for new property investors

Published Oct 31, 2016

One of the most common things we hear from members in branch is “I wish I could afford to invest”.

But by following a clear, step-by-step plan, many people are surprised by how easy it can be to get a foot on the property investment ladder.

Find out what you can borrow

The first step is to determine how much you can comfortably borrow. Our loan calculator will give you a quick estimate of how much you can safely take on and what your repayments will be.

If you’re not quite ready to invest just yet, use this tool as guide to how much you’ll need to save week-to-week.

Consider extra expenses

Next, consider extra expenses. Upfront you’ll need to pay things like stamp duty, mortgage insurance, as well as any building and pest inspections. Our expenses calculator can help you work this out.

Choose the right loan

It’s important to choose a loan that’s geared towards investors rather than owner-occupiers. Interest only loans are suited to some investors.

Consider your deposit amount

You’ll hear the term Loan to Valuation Ratio or LVR often. This determines how much deposit you’ll need. An LVR of 90%, for example, means you’ll need a 10% deposit.

Alternatively, if you don’t have enough cash upfront for a deposit, but have enough equity in an existing property, you may use this along with a partial deposit to make up the remaining 10%.

Also, keep in mind that on top of the 10% deposit there are additional costs you’ll need to pay, including, but not limited to taxes, legal fees, etc.

Choose the right property

This is where the fun stuff starts, but it’s also a critical decision for the long-term health of your investment. A little research into the area you plan to invest can pay big dividends. Pay particular attention to any planned developments and projects that may affect the value of your property.

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If you’re interested in getting a foothold on the investment property ladder, CUA can help you with the support and home loan options you need. Find out more.

This is only intended as a general guide in relation to issues you may want to consider when property investing. It is not intended to be an exhaustive list of all relevant issues and you should take into account your own particular circumstances, and obtain independent expert advice where needed, before proceeding.